The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai Bench held that the penalty cannot be levied since Show Cause Notice (SCN) issued by Directorate of Revenue Intelligence (DRI) is invalid.
Ms. A. Aruna, Advocate appearing for the assessee-appellant, M/s. Sattva CFS & Logistics Private Limited contended that the Directorate of Revenue Intelligence (DRI) had issued a Show Cause Notice on the allegations of seizure of Red Sanders on seven noticees while the proposal against the appellant herein was as to the levy of penalty under Section 114 of the Customs Act, 1962. The Adjudicating Authority, being satisfied, had refrained from imposing penalty on the appellant herein. The Revenue being aggrieved, had preferred the first appeal. he First Appellate Authority vide impugned order had, without considering the pleadings of the assessee therein and without finding any fault with the findings of the Adjudicating Authority, ordered de novo adjudication, etc.
On the other hand, Mr. M. Jagan Babu, Departmental Representative, supported the findings of the First Appellate Authority to contend that it was an order for de novo adjudication and hence, prayed for retention of the impugned order.
The coram of Judicial Member, P. Dinesha while relying on the decision of the Supreme Court in the case of M/s. Canon India Private Limited v. The Commissioner of Customs said that the penalty levied is invalid, since the Notice issued by the DRI is held to be invalid.
“The Board had thereafter issued an Instruction No. 04/2021-Customs dated 17.03.2021 in F.No.450/72/2021-Cus-IV stating that the said instruction is issued specifically in respect of the Show Cause Notice against Shri Anil Aggarwal and 11 others and, in any case, the Instruction cannot override the decision of a three Judge Bench of the Apex Court, which is binding as the law of the land. Clearly therefore, there was no jurisdiction with the DRI to issue the Show Cause Notice in question and consequently, the whole proceedings become ab initio void,” the CESTAT while setting aside the order noted.
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